The demand for blockchain technology is intensifying at a rapid pace, signalling the stipulation for talent and expertise. What unfolded as a consequence of the cataclysmic financial crisis in 2008, has become one of the most radical solutions to alter the groundwork of numerous industries. Blockchain technology has become an eccentric solution to the predominant banking system, providing more control to the users and a level-playing field for new financial entrepreneurs.
Although it is renowned in the financial world, very few people comprehend the capabilities of the technology beyond that framework. The severe precariousness of the market and pessimism surrounding the notion of decentralised finance has dispersed unsolicited publicity, even though the technology rapidly evolved, and surfaced as a key disruptive player in the non-financial context.
Blockchain is known as a type of “Distributed Ledger Technology” or DLT. This technology allows storage of data in multiple decentralised nodes, as opposed to centralised servers. The data is processed and stored in blocks, each having a timestamp and a distinctive identifiable “hash”. All the blocks are cryptographically linked together to form a chain – hence creating a series of evidence that could be monitored by the users, depending on the type of network. The core functionality is known as the “consensus algorithm” – when a transaction is sent to a decentralised network, it is examined and substantiated against the data stored in some or all the nodes connected to the protocol, providing a robust verification process. Since the data is stored permanently, it is arduous for hackers to commit transactional fraud.
Blockchain-based applications are extensively known as “Decentralised Applications” or “DApps”. Corporations and private institutions around the world are widely adopting the “private-permissioned” to develop DApps, with stricter control over data sensitivity and pseudonymity. Besides, several researchers underscored the use cases of blockchain technology, including the application in non-clinical and clinical research-based settings.
In the corporate world, a blockchain-enabled platform developed by IBM and Maersk Line is currently being implemented widely for supply chain management purposes. Volvo, the Swedish automotive company, is also using the technology to trace the source of cobalt in their vehicles. Additionally, the technology has also wide-ranging application in the context of industry 4.0, pharmaceutical supply chain, counterfeit drug protocols, governance, and public policy.
Blockchain has the potential to scrupulously disrupt financial services, and the application of decentralised finance is taking over the world by storm. While billions in investment continue to flow into the nascent technology, only a limited number of professionals are possessing strong comprehension of the technology, the growth of which is stemmed by unconstructiveness surrounding the context of the financial application.
Cryptocurrencies such as Bitcoin is merely one use-case of blockchain. But due to its technological design configuration, it is deemed to be a store of value for financial assets. However, its computationally intensive protocol is one of the many disadvantages, which requires a large number of node operators and heavy electricity usage for it to be operational. Therefore, entrepreneurs unearthed functions of the blockchain that could be utilised in several non-financial contexts.
In the context of Bangladesh, blockchain could have substantial implications in altering current operational circumstances. The technology can be applied to improve a plethora of e-governance services such as identity management and electronic KYC (Know Your Customer), asset transfer, certificate or bond issuance, electronic voting and blockchain-enabled credit scoring. Using private blockchain technology, asset management can be entirely revamped by facilitating peer to peer transaction, automated registration, certificate verification, issuance and transfer of ownership, a process which is too arduous, paper-based and involves a number of intermediaries. The technology can have further implication in the agricultural sector by developing blockchain-enabled supply chain management. Other potential applications include national healthcare data management, clinical data storage and user privacy, financial asset tracking and supervision, peer to peer lending, educational and governmental certificate validation, and welfare trust management.
Bitcoin was created to confront orthodox business models applicable to global payments – to create a decentralised universal currency. But that is not what the technology is all about. Pragmatically, beyond hype, blockchain will have a high impact on e-governance, judiciary, banking, utilities, and insurance management in Bangladesh. While centralised structures in the country dominated for centuries, blockchain aided in forming a new layer of technological infrastructure with a universal application, providing transparency and resiliency.
However, the conjectures around the cryptocurrencies have eclipsed the significance of a peer-to-peer and self-regulated network. Thus, many did not recognise the need to create educational materials around the technology. Although straightforward research via social media site, LinkedIn, would provide an idea of the salary range for blockchain professionals – typically they are paid a higher than average salary in both financial and non-financial sectors.
The notion of cynicism did not stop the Ivy League institutions from researching this sector. Top ranking universities in both the UK and the US such as the Oxford University, UCL, University of Cambridge, Imperial College London, London School of Economics, Harvard, and Massachusetts Institute of Technology are all offering tailored comprehensive courses on blockchain. Online high-intensive courses could be beneficial too, such as the one offered by the LSE on “Cryptocurrency and Disruption”, which delivers a pathway to obtain verifiable competencies to comprehend the financial infrastructure and ecosystem. Furthermore, studying computer science can provide a gateway to becoming a developer; however, robust business knowledge can be ascertained by exploring the fundamental fields such as Finance and Economics.
Regrettably, the universities in Bangladesh are yet to take the opportunity of this colossal market gap and teach ideas that will have a substantial impact over the next few years. This is partially due to the lack of experts in this field. While it is essential to focus on ideas that are currently in-demand, when selecting a subject, it is crucial to comprehend what technologies will be in demand five to seven years ahead of time. Another justification why blockchain and other breakthrough technologies have not penetrated developing countries is due to the apprehensiveness of the corporations and institutions to adopt them.
The macro-economic analysis of an organisation can be conducted using various theoretical frameworks; however, there are certain drivers for change having a significant impact on the success or failure of a strategy. Theories such as “megatrends”, “inflexion points” and “weak signals” can help characterise the social changes that are leading macro-economic changes. Evidently, blockchain has been a major driver for strategic growth in the developed countries, and an inflexion point for many organisations, especially the financial corporations such as VISA, Mastercard, JPMorgan, and Credit Suisse. These companies are extracting short- and long-term value, not to mention, Mastercard being on a sprint with Chinese companies, having over 80 patents filed for processing transactions on the blockchain. Companies that resisted this technology five years ago are now embracing it strategically. For example, VISA is now providing opportunities to blockchain startups such as “Wirex” for allowing their users to make payments with cryptocurrencies.
Nevertheless, Bangladesh is leaving small footprints in the blockchain world map. The UAE-based RAKBANK has recently announced international money transfer between the users of RAKMoneyTransfer and Bank Asia, using Ripple’s blockchain network. In August, the first official blockchain-enabled transaction was executed by Standard Chartered bank using Contour’s Corda blockchain. The government of Bangladesh has also taken steps to create a tentative 10-year roadmap to pursuing the future application of blockchain in various market verticals.
It is vital to embark on strategic analysis from several perspectives, since startups, SMEs, private and public sector are all vulnerable to technological disruptions. Due to higher funding for research in developed countries, organisations and universities are likely to take the risk of research and development work on technologies such as blockchain. If they believe the technology will be successful, it is expected they would implement it as a tactical move. As the technology grows, the demand for skilled experts in Bangladesh will continue to increase, which is why the universities must take the opportunity now. At the same time, the public and private sector should commence R&D (research and development) initiatives that would assist them in adopting blockchain. R&D initiatives also help in aiding pupils boost their curiosity on future technologies.
A World Economic Forum report published in 2018 reported that 10 per cent of the world’s GDP (gross domestic product) would be stored in blockchain by 2027, which equates to assets worth approximately US$12 trillion. Furthermore, research undertaken by Deloitte and Mckinsey also shed a positive light on the future of this industry. These studies underscore the notoriety of the technology and its prospective future impact. Having a direct influence on sectors such as energy market, cybersecurity, big data, public sector governance, Internet of Things and supply chain management, institutions need to establish optimal blockchain strategy for different use cases pertaining to their market position and influence over regulatory barriers that require standardisation. It is time when technologies such as blockchain are underscored in both the corporate world and the academia in developing countries, offering better prospects and enhanced ways of thinking for the generations to come.
Farabi Shayor is founder & research lead, IntelXSys and CRI REX lead, Imperial College, London.